Articles

Section 40 of New Jersey Worker’s Compensation Act As Related to Other Personal Injury Claims

By:
Attorney Edward Slaughter, Jr

Section 40 of the New Jersey Workers’ Compensation Act
provides that an employer, or its Workers’ Compensation insurance company, will
be reimbursed if an injured worker also collects from a person unrelated to the
employment (a third party) for the same personal injury. The reason for this is
to prevent a worker from collecting twice for the same injury. While this
sounds good on the surface, it is not always fair.

I’ll give you an example.

Suppose a worker gets seriously hurt as he/she is operating
a machine. The reason for the accident was the fault of the employer who
removed a guard from the machine. If the guard were present it would have
prevented the accident. Without it, the work could be done faster and the
employer could make more profit.

Workers’ Compensation benefits had to be paid to the worker
because the worker was injured at work. These monies were paid by the employer
or, more typically, by his workers’ compensation insurance company.

The worker went to a personal injury lawyer who advised that
under the New Jersey Products Liability Act the worker had a right to make a
claim against the machine manufacturer. Suit was brought against the machine
manufacturer.

The law of New Jersey says that a manufacturer of a machine
has an obligation to prevent a machine he makes and sells from injuring any
likely user of the machine. By designing the machine in a way that allowed the
machine to be run without guards, the manufacturer violated the products
liability act. A judgment was entered against the manufacturer.

By law, the employer’s conduct was not considered even
though his conduct caused the accident. This is so because the law does not
allow a jury to consider the acts of the employer even though he may have been
cited by the OSHA for his conduct.

So, under Section 40 of the New Jersey Workers’ Compensation
Act, he or his workers’ compensation insurance company gets back most that it has
paid in workers’ compensation benefits, even though the accident was the
employer’s fault. This seems unfair.